UK authorities fight for MF Global's $700 million

NEW YORK (CNNMoney) -- U.S. and UK authorities are wrestling over $700 million in funds from MF Global customers that has been found in the failed futures and commodities trader's London operations.

The U.S. bankruptcy court trustee says that the $700 million in MF Global client funds is all from U.S. customers and should be returned to them by the British authorities. But the Joint Special Administrator of MF Global UK said only that the $700 million has been discovered in client funds and that it is not prepared to distribute the money yet.

"We are pleased with progress in the collection of both client and company monies, and are working hard to prepare to make an interim distribution of client money as soon as reasonably practicable," said the British authority.

James Giddens, the U.S. trustee appointed to try to recover assets in the MF Global (MFGLQ) bankruptcy case, said in a statement Friday that he's disappointed with the British response. He has retained UK lawyers to try to get the money returned immediately. (MF Global: Sorting through the debacle)

"While we have made significant progress in identifying and distributing customer property held by U.S. depositories, the UK administrators' position will significantly affect, in the near term, my ability to return a substantial amount to US customers dealing in foreign futures," he said.

Executives of MF Global, including its former CEO Jon Corzine, have denied knowing what happened to the missing customer funds.

Authorities including the Justice Department are investigating the collapse of MF Global, which filed for bankruptcy Oct. 31 after the discovery of missing client funds killed the chance for a last-minute sale of the firm that would have kept it alive.

Friday 17 senators from various farming states in the Midwest and Great Plains, wrote to Attorney General Eric Holder asking that Justice use all possible resources to investigate and prosecute any executives who misused client funds.

"We understand that criminal cases involving complex financial transactions are sometimes difficult to prove beyond a reasonable doubt," said the letter. "However, tens of thousands of American farmers have seen their customer accounts raided by MF Global to the tune of hundreds of millions of dollars. The need for extraordinary effort should not discourage the Department of Justice from pursuing this case to the full extent of the law."

A Justice spokeswoman did not have any immediate response to the letter.